Income Tax

You are required to pay income tax in each tax year, and the rate depends on your income. Your income is in the form of earnings, as well as investments and savings.

As of 6 April 2016, you are not required to pay income tax if you earn less than £11,000 a year, and this sum is known as the tax-free Personal Allowance.

Income tax rates

The basic rate of tax is charged at 20 per cent, and you start paying this when your income is more than £11,000 a year, as of 6 April 2016.

The higher rate of tax is charged at 40 per cent, and you start paying this when your income is more than £32,000 a year, as of 6 April 2016.

The additional rate of tax is charged at 45 per cent, and you start paying this when your income is more than £150,000 a year, as of 6 April 2016.

Accountancy News